NSW set for $1bn surplus

The NSW government is on track to report a $1 billion budget surplus for 2009-10, almost 10 times the $101 million it predicted in June, giving it extra spending money before the state election in March.

Premier
Kristina Keneally
said yesterday she would soon unveil the government’s “platform for change".

A poll this week suggests NSW ­Labor is heading for a drubbing next year, with its primary vote at a record low 25 per cent.

The once-popular Ms Keneally has also slipped out of favour. Her satisfaction rate dropped eight points to 39 per cent and her dissatisfaction rating jumped seven points to 44 per cent.

The government has been under pressure in recent weeks to explain where it will get $500 million to start building a rail line from Parramatta to Epping in western Sydney. The rail link was promised out of the blue during the federal election campaign. The state government also needs up to $400 million to replace potentially dangerous gas heaters in schools across the state.

According to the latest financial statement published by NSW Treasury, the state’s budget swelled to $1.875 billion at the end of May.

A comparison of the last three years of May financial statements with actual budget results indicates the government is likely to report an official surplus of about $1 billion by the end of the financial year.

The state’s audited financial ­accounts will be released late in ­October.

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A spokesman for Treasurer
Eric Roozendaal
agreed yesterday that the final result would probably “be better than estimated in the 2009-10 budget due in part to stronger revenues".

However, he said it would be “signficantly lower" than the surplus in May because of “a number of ­extraordinary payments made in June and a large catch-up in agency expenditures".

For example, Labor has in the past given additional funds to the Department of Health for bills it owes.

Standard & Poor’s analyst Anna Hughes said that the government was likely to beat its own forecast of $101 million, which was based on the accounts at the end of March.

“The states are usually fairly conservative in their budget forecasts and the NSW economy is doing better than it was," she said.

Payroll tax and stamp duty revenues were higher than expected last year due to a resurgent high-end property market and an improvement in economic performance.

As part of a federal election postmortem and following this week’s ugly poll results for Labor, Ms Keneally told reporters yesterday that “ill-disciplined behaviour" from MPs had “destroyed the trust between the government and the people who elected it".

She also said the recent election campaign showed there was a “need for political parties to articulate what it is they stand for and what it is they will do in government".

Opposition Leader
Barry O’Farrell
said yesterday the Coalition wanted to complete the $2.6 billion Parramatta to Epping rail line but it would not be a priority for his government.

Prime Minister
Julia Gillard
promised funds of $2.1 billion for the project during the campaign.

“Our priority will remain building the rail links out to the southwest and the northwest," Mr O’Farrell said.